SAN FRANCISCO — UC Berkeley will more than double its annual payments to its host city to

$1.2 million to settle a February lawsuit challenging a sweeping long-range development plan that city officials claimed would clog the already-bursting city with more cars and buildings.

Berkeley city leaders and UC Berkeley officials called the settlement a “landmark agreement” that gives both sides a voice in guiding new university, private and public development in downtown and upgrading public transit at the city’s core.

“We could not be more pleased about this historic agreement between the university and the city,” UC Berkeley Chancellor Robert Birgeneau said. “We think that it, in fact, represents a model for the entire state of California, for the university and for local communities.”

Berkeley sued UC Berkeley in February to stop expansion plans and then later threatened to sue to recoup back parking taxes and sewer fees it said itwas owed. Under the settlement, it will drop its efforts to seek that additional money.

Under the settlement, 1,270 new parking spaces — rather than the 2,300 originally proposed — will be allowed by 2015 without further review. That reduction is contingent on the implementation of a new AC Transit “rapid bus” on Telegraph Avenue by 2010.

The $1.2 million annual payments — up from $500,000 yearly — will go to help offset the costs of sewers and storm drains and fire services, as well as other programs, including neighborhood improvement projects and joint programs to improve transportation. The payments will be bumped up by 3 percent annually for a cost-of-living adjustment.

Berkeley Mayor Tom Bates said the point of the lawsuit was not solely about money. “It’s not like (the university) is rolling in dough. We wanted to make sure the city had a meaningful voice and was at the table,” he said at a news conference following the announcement.

He called the agreement a “giant step forward toward a lasting and equal partnership between one of the world’s great universities and one of its most livable and progressive cities.”

Berkeley sued a month after UC’s governing board approved the 2020 Long-Range Development Plan, a blueprint for development on campus and in the city over the next 15 years.

Plans call for 2.2 million square feet of building space, research facilities, parking, housing and classrooms.

Bates said the university had not done enough study on what environmental impacts 2.2 million square feet of building — more square footage “than the entire Empire State Building,” — would have on the city and its residents.

The city was seeking some mitigation for those impacts.

The Berkeley City Council approved the settlement in closed session Tuesday, and University of California regents signed off on it Wednesday during a closed-session meeting at UC San Francisco.

The annual payments will begin in 2006 and run through 2020. The payments will be divided four ways — $600,000 to fire and emergency services and $200,000 each to sewer and storm drain infrastructure, transportation projects and neighborhood improvement projects.

In addition, the campus will explore a program that city leaders claim could pump hundreds of thousands of dollars into Berkeley annually.

The program would funnel sales tax from university purchases back to the city rather than into the state’s budget. Similar programs operate in San Jose and Los Angeles.

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